Settled

With litigation from California’s energy crisis a decade ago now settled and an exit from commodity trading imminent, Sempra Energy’s remaining businesses face a mixture of challenges and opportunities as outlined by Sempra senior executives last Tuesday during a conference call with financial analysts.

With litigation from California’s energy crisis a decade ago now settled and an exit from commodity trading imminent, Sempra Energy’s remaining nonutility businesses face a mixture of challenges and opportunities as outlined by Sempra senior executives Tuesday during a conference call with financial analysts. During the call the company reported greatly decreased first quarter earnings compared to the same period last year (see Daily GPI, May 5).

Big spikes in the Northeast led across-the-board price gains Monday as often severely cold weather settled in across most of the U.S. and Canada for what was looking like a fairly long siege, prompting quite a few pipeline restrictions (see related story). The return of industrial load from a holiday weekend added extra impetus to the market.

As 2010 got under way biting cold settled in across the northern tier of states, sending prices spiking in the Northeast, while pipelines began tightening restrictions with an eye to an extended period of below-normal temperatures and peak demand.

December blizzards in the Plains, Mid-Atlantic and New England and the current wave of icy air that has settled over much of the United States, particularly in the East as far south as Florida, are the precursors to what could be the worst winter in 25 years, according to AccuWeather.com Chief Long Range Forecaster Joe Bastardi.

The Natural Gas Supply Association (NGSA) on Monday said it believes that 13 financially settled natural gas contracts traded on IntercontinentalExchange (ICE) — which are currently under review by the Commodity Futures Trading Commission (CFTC) — do not perform a significant price-discovery function (SPDF).

September natural gas futures parted ways with a strong crude oil market and settled lower Tuesday as traders cited the inevitability of a $2 handle and economic and weather reports were unsupportive. September futures dropped 6.7 cents to $3.096 and October fell 9.1 cents to $3.464. September crude oil jumped $2.44 to $69.19/bbl.

Natural gas futures gave up almost all of Tuesday’s gains and settled stoutly lower Wednesday in active trading on the New York Mercantile Exchange. The floor was abuzz with talk of the August contract moving sharply lower, and one set of estimates surfaced that put Thursday’s expected storage addition ahead of long-term averages.

TransCanada Corp. has settled some old business that could have been a stumbling block to development of a long-haul pipeline to carry Alaska North Slope natural gas to Lower 48 markets. The Federal Energy Regulatory Commission recognized the surrender of a certificate issued in 1977 to TransCanada subsidiary Alaskan Northwest Natural Gas Transportation Co. In the opinion of some, that certificate for a gasline project that never got built could have created a $9 billion liability to the subsidiary’s former partners to be borne by future shippers on the Lower 48 pipeline. While it was lobbying last year for the state concession to build the pipeline under the state’s Alaska Gasline Inducement Act process, TransCanada said the so-called “withdrawn partners liability” was a nonissue. Even if old legal business is not going to do in the company’s pipeline plans, current market circumstances still could. Weak gas prices and burgeoning Lower 48 gas production, as well as the potential for stepped-up imports of liquefied natural gas, all are causing some to question the economics of a Lower 48 gasline.